RFC 0008: Lease-up modeling section for value-add and ground-up deals

Summary

Add a lease_up_schedule section to the format spec that models the trajectory from current to stabilized rents over a defined window. Today the format jumps straight from rent_roll (a snapshot in time) to noi_model (a stabilized projection) with no structured representation of the path between them. This RFC defines a section that captures monthly or quarterly rent rolls during the lease-up phase, plus the assumption set that drives them.

Motivation

Two of the most common scenarios in CRE underwriting cannot be cleanly represented today:

1. Value-add multifamily — the buyer's rent_roll is the current snapshot but the underwritten NOI assumes 18 months of natural turnover at higher rents. The path from one to the other (turnover rate, market rent assumption, vacancy during lease-up, capex per unit) is the entire investment thesis, but there is no section to put it in.
2. Ground-up development / lease-up of new construction — there is no rent_roll at acquisition (the building doesn't exist yet); just a projected month-by-month absorption curve. Today this gets stuffed into extensions or _notes with no structure.

Without a normative section, every implementer reinvents the schema. The Riverside office example (added in this same release) had to put its lease-up assumptions in deal_context._notes rather than a structured block.

Proposed change

Format spec (UW_FORMAT_SPEC_v1.md §4.X)

Add lease_up_schedule as a new standard section:

{
  "_meta": { ... },
  "model_type": "natural_turnover" | "absorption_curve",
  "stabilization_target_date": "YYYY-MM-DD",
  "assumptions": {
    "monthly_turnover_rate_pct": 0.04,
    "market_rent_psf_at_stabilization": 22.00,
    "vacancy_during_lease_up_pct": 0.18,
    "concession_months_per_lease": 1,
    "tenant_improvement_psf": 35.00,
    "leasing_commission_pct": 0.06
  },
  "schedule": [
    {
      "period": "2026-Q3",
      "occupied_sf": 31000,
      "leased_sf": 31000,
      "in_place_rent_psf": 21.50,
      "market_rent_psf": 22.00,
      "vacancy_pct": 0.27,
      "rent_revenue": 166375,
      "concessions": -5400,
      "ti_lc_capex": -42500,
      "net_cash_flow": 118475
    },
    { "period": "2026-Q4", ... }
  ],
  "stabilized_summary": {
    "occupied_sf": 40500,
    "occupancy_pct": 0.953,
    "annualized_egi": 858000,
    "annualized_noi": 478000
  }
}

Protocol spec

Add a cross-section consistency check (proposed code CC-11):

The final period in lease_up_schedule.schedule MUST agree (within 2%) with the values in noi_model when noi_model._meta.scenario == "stabilized". If they disagree, the validator emits CC-11 with severity warning.

Calc engine

No new builtins are needed. The schedule is data, not formulas — the existing path traversal (lease_up_schedule.schedule[5].rent_revenue) and sum() builtin let custom calculations roll up the schedule.

Compatibility analysis

• Existing .uw.md files — unaffected. The new section is opt-in.
• Tier-1 Reader — additive. Readers MUST parse lease_up_schedule as a generic section block; rendering is implementation-defined.
• Tier-2 Editor — additive. Editors that don't understand the section can still edit it as opaque JSON.
• Tier-3 Calc Host — additive. The new path traversal works with the existing AST.
• Tier-4 Agent Host — additive.
• Modules — modules that already define their own lease-up extension sections (e.g. a hospitality module's RevPAR ramp) keep working because extension sections coexist with standard sections.

No existing files break.

Conformance impact

Existing fixtures: none change.

New fixtures to add:

• conformance/tier-1-reader/fixtures/03-value-add-lease-up.uw.md — multifamily value-add deal with a 24-month natural-turnover schedule. Validates that the section parses correctly and CC-11 does not trip when stabilized values agree.
• conformance/tier-1-reader/malformed/04-lease-up-stabilized-mismatch.uw.md — schedule's final period disagrees with noi_model by 8%; expects CC-11 to fire.

Reference implementation

• Files affected:
  • spec/UW_FORMAT_SPEC_v1.md — new §4.X.
  • packages/uwmd-core/src/types.ts — type for the schedule entries.
  • packages/uwmd-core/src/validator.ts — implement CC-11.
  • packages/uwmd-core/src/protocol.ts — BUILTIN_REMEDIATIONS entry for CC-11.
  • packages/uwmd-core/src/renderer.ts — render the schedule as a table in the chat / summary outputs.
• API surface:
  • New exported type LeaseUpSchedulePeriod.
  • getSection(parsed, 'lease_up_schedule') returns the new shape.
• Test plan:
  • Unit test: parse + validate a valid lease_up_schedule with no issues.
  • Unit test: validate trips CC-11 when stabilized vs noi_model diverge >2%.
  • Renderer test: chat-format render includes a period-by-period table.

Alternatives considered

1. Stuff lease-up into assumptions. The status quo for some implementers. Worse because: assumptions are scalars + flat ratios; a period-by-period schedule is fundamentally tabular and gets crushed when forced into that shape.

2. Use extensions or an x_lease_up section. Worse because: every implementer reinvents the schema, defeating the format's interoperability promise. This is exactly the case the spec's "promote to standard section" path (Appendix C.7) was built for — the demand pattern is uniform across asset classes.

3. Extend noi_model with a pre_stabilization_periods array. Worse because: it conflates the snapshot model (stabilized year-1 NOI) with the trajectory model (path to stabilization). Two distinct concepts deserve two sections.

Unresolved questions

• Granularity: monthly vs. quarterly periods. Suggest allowing both via a period_granularity field, defaulting to quarterly. Some lenders model monthly during lease-up; some model quarterly. Forcing one is unfriendly.
• Should the schedule support multiple scenarios (base / upside / downside)? Probably yes, via the existing multi-variant section pattern (like operating_statement). Defer the variant key naming to implementation.
• Interaction with dcf cash flows: should the lease-up schedule auto-feed dcf.annual_cash_flows[0..N]? Useful but adds coupling. Recommend defining the data shape now and adding a derive_dcf_from_lease_up() calc in a follow-up RFC.

Prior art

• Argus's "Tenant Schedule" combined with "Vacancy Allowance" curves model the same trajectory with a tighter coupling to cash-flow generation.
• Excel-based underwriting models almost universally have a "Lease-Up" tab; this RFC just gives that tab a normative schema.
• The hospitality RFC (0006) already has a similar revpar_ramp concept — the two should share the period structure once both land.